Ex-execs say fired by Microsoft for hostess charge doubts

Two former Microsoft MSFT managers have sued the company, saying they were forced out after they raised concerns about an employee’s large claims for expenses in South Korea that may have included sex services.

The lawsuit, filed by George Engstrom and John Stockwell in state court in Seattle, says an unnamed Microsoft employee ran up entertainment expenses of more than $22,000, including taking potential business partners to South Korean “hostess bars,” which often provide sexual services to customers.

Microsoft dismissed the claims and said it would fight the matter in court.

Engstrom and Stockwell say they alerted Microsoft to the outsize expense claims and possible link to prostitution in 2011 and that the company began an investigation. The lawsuit says the unnamed employee admitted to Stockwell that he had taken executives of other companies to hostess bars, but denied that he was expensing any sex services.

During the internal probe, Stockwell says Microsoft’s human resources department asked him to drop the issue and raise the employee’s performance review. After Stockwell and the company could not agree, the lawsuit says, Microsoft unilaterally raised the employee’s performance rating and allowed him to transfer to another division.

The plaintiffs say they were soon moved off a project related to Microsoft’s Bing search engine, and their subsequent projects were scaled down or shut down.

Engstrom and Stockwell say they both received performance ratings of ‘5’ – the lowest on Microsoft’s scale – in 2013 and the company fired them months later.

The two are suing for lost pay and benefits and damages for emotional distress. A trial is set for March 7, 2016.

“We’ve carefully reviewed this case and found nothing to substantiate the speculation in the complaint or the allegation of retaliation, and we’re confident a court will agree with us,” Microsoft said in an emailed statement.

“We always encourage employees to raise concerns that they may have, and take such reports seriously.”

Lockheed Martin to pay $62 million to settle 401k lawsuit

Feb 20 (Reuters) – Lockheed Martin Corp agreed to pay $62 million to settle a lawsuit in which employees accused the defense contractor of mismanaging their 401(k) retirement plan, court papers made public on Friday show.

In a filing with the federal court in East St. Louis, Illinois, lawyers for the plaintiffs called the settlement the “largest ever” in a case alleging excessive fees in 401(k) litigation.

More than 108,000 plan participants were represented in the lawsuit, court papers show.

The lawsuit, which began in 2006, contended that Lockheed concealed excessive fees that were imposed on plan participants, and which ultimately dampened investment returns.

It also said Lockheed concealed how portfolio managers for its “stable value” fund option invested too conservatively, causing the fund to greatly underperform its peers and make it harder for employees to keep up with inflation.

According to settlement papers, Lockheed would make payments directly into class members’ retirement plans, or issue checks to people who may have left the company. It would also take steps to keep future fees down, the papers show.

The Maryland-based company denied wrongdoing, but settled to avoid the expense and uncertainty of litigation, the papers show.

A trial had been scheduled to begin in December, but was averted so both sides could resolve the case through mediation.

The plaintiffs are represented by the law firm Schlichter Bogard & Denton. Legal fees may total up to one-third of the settlement amount, or $20.67 million, court papers show.

The case is Abbott et al v. Lockheed Martin Corp et al, U.S. District Court, Southern District of Illinois, No. 06-00701. (Reporting by Jonathan Stempel in New York; editing by Andrew Hay)

Wall Street futures are down slightly this morning, while European indexes are mixed. Greece’s ASE index rose on news that the nation’s government submitted a proposal for a six-month extension of its bailout. Most Asian markets were closed for the Lunar New Year holiday. Meanwhile, Japan’s Nikkei 225 Stock Average reached a 15-year high today.

After receiving an ultimatum from EU officials, Greece relented today. The financially-indebted nation requested a six month extension to its current bailout agreement. The eurozone’s 19 finance ministers will convene on Friday in Brussels to review the proposal, although Germany has said it doesn’t like the request. Greece’s bailout agreement was set to expire at the end of the month, leaving the nation without access to over 10 billion euro ($1.15 billion) in aid.

2. Walmart reports quarterly earnings.

The world’s largest retailer reports its fiscal fourth-quarter earnings before the market opens. Analysts anticipate Walmart WMT to bring in earnings of $1.53 a share on revenues of $132.4 billion, according to estimates by Thomson Reuters. Walmart is hoping to notch a second straight quarter of same-store sales growth in the U.S. following an extended period of flat sales. The retail giant is also a bellwether for how the common consumer is faring these days, especially low-income shoppers. Look to see what it says about the effect of lower gas prices to see if consumers are spending the extra cash or squirreling it away into savings.

3. Samsung gets into mobile payments.

Samsung shelled out an undisclosed sum to buy LoopPay, a mobile payment startup. The deal would give Samsung the technology to go head-to-head with Apple Pay. LoopPay already markets itself as a competitor payment solution since it is compatible with existing Apple Pay systems in place across the U.S. It currently uses a fob or smartphone case to store the technology that can be easily tapped to pay at equipped retailers. The LoopPay founders will join Samsung’s Mobile Division to advance the smartphone maker’s mobile wallet capabilities, the companies said.

4. Electric battery maker sues Apple.

Chinese battery maker A123 System Inc. is bringing Apple to court over allegations that the tech giant poached five of its battery experts, violating their employment agreements. Apple AAPL has been waging “an aggressive campaign to poach employees of A123 and to otherwise raid A123’s business,” the company wrote in its filing. Apple has also reportedly brought on at least 60 former Tesla TSLA employees across a range of functions, from hardware, software, manufacturing and supply chain engineers, according to a LinkedIn review by the Reuters. The hires point to mounting evidence that Apple may be developing its own car.

5. SABMiller CFO is out the door.

Jamie Wilson, the current chief financial officer of SABMiller, resigned, saying his leave is for personal reasons. Miller will step down immediately and be placed on “gardening leave” through March 31, after which he will officially exit the company. The world’s second-biggest brewer by sales faces a challenging time in the beer market. Analysts say it is an industry ready for consolidation, and there’s been reports that its bigger rival Anheuser-Busch InBev BUD is an interested buyer. SABMiller, known for brands such as Miller Lite, Pilsner Urquell and Peroni, was rejected in its own attempts to buy Heineken last year.

Chesapeake accuses founder McClendon of stealing secrets to start a new firm

Roughly two years after ousting Aubrey McClendon, Chesapeake Energy is reportedly accusing its co-founder and former CEO of stealing sensitive company information on his way out the door.

The Oklahoma City-based energy giant filed a lawsuit in federal court Tuesday alleging that, in 2013, McClendon spent his final months at the helm of Chesapeake hoarding company data on available land with potential for oil and gas mining, according to Reuters. Chesapeake CHK says McClendon had maps printed and also e-mailed himself information on open acreage in the Utica Shale formation, in Ohio, before putting that data to use for his next venture: founding rival company American Energy Partners.

McClendon co-founded Chesapeake in 1989 and helped accelerate the company’s growth by adopting the now widely-used drilling method of hydraulic fracturing, also known as “fracking.” With McClendon at the helm, Chesapeake grew to become the country’s second-largest natural gas producer, behind only Exxon Mobil XOM. In 2008, Fortune profiled McClendon, noting Chesapeake’s ascent amid U.S. natural gas prices that were skyrocketing at the time, but have since come back down to earth. (Those declining natural gas prices left Chesapeake saddled with debt after its rapid expansion efforts, and the recent drop-off in oil prices has seen the company’s stock price fall nearly 17% over the past year.)

However, McClendon agreed to step down from his CEO role in early 2013 after reports surfaced revealing he had borrowed more than $1 billion against his own stake in company oil wells. The reports raised questions about a possible conflict of interest, although a Chesapeake internal investigation found no evidence of wrongdoing. McClendon was also under SEC investigation for the loans, much of which came from financial entities with investments in Chesapeake, but the government dropped its probe last year.

Within a year of McClendon leaving Chesapeake, Reuters reports, an affiliate of McClendon’s American Energy Partners had raised $1.7 billion in equity and debt that the company said it would use to buy 110,000 acres in the Utica Shale formation and begin drilling. Chesapeake’s lawsuit accuses American Energy Partners of violating Oklahoma trade secrets laws and the company is asking a federal judge to create a trust to house all of the income McClendon’s current company has earned from Utica Shale drilling, which the lawsuit claims was earned as a result of stolen Chesapeake data.

In a statement Tuesday, McClendon and American Energy Partners said they would “respond vigorously to a baseless legal action” brought by Chesapeake. Chesapeake promised McClendon he could have information on thousands of oil wells upon his departure from the company, the former CEO said in a press release. That release also says McClendon’s separation agreement with Chesapeake gave him the right to share that information with future employees and business partners.

“It is beyond belief that the company that I co-founded 25 years ago and where I worked tirelessly to build it into one of America’s largest and most successful oil and gas producers has now decided to add insult to injury almost two years to the day after my resignation by wrongly accusing me of misappropriating information,” McClendon said in a statement.

He added: “It is a sad day to see Chesapeake stoop so low as to sue its co-founder for having information that was earned, paid for and provided through my contracts with Chesapeake.”

In a statement issued Tuesday afternoon, Chesapeake disagreed with McClendon’s claim that he obtained the company data in question legally, as part of his separation agreement. “We strongly disagree with Mr. McClendon’s and AEP’s allegations and will address them in the appropriate forum,” Chesapeake spokesman Gordon Pennoyer said.

UPDATE: This article has been updated with a response from Chesapeake to statements by McClendon and American Energy Partners.

Uber faces lawsuit in U.S. court over alleged Delhi passenger rape

Uber has been sued in U.S. court by an Indian passenger who alleges she was raped in New Delhi by one of the ride hailing service’s drivers.

The lawsuit, filed in U.S. Federal Court in San Francisco Thursday, accused the company of failing to keep her safe.

“Opening up the Uber app and setting the pick-up location has proven to be the modern day equivalent of electronic hitchhiking,” the suit says. “Buyer beware – we all know how those horror movies end.”

The passenger, who remains anonymous, says she was raped in December while riding home alone in India’s capital city. The court document continues that the plaintiff reported the rape to police and sent an email to Uber, although the suit adds that the woman never received a response back. City officials have since banned Uber, which has responded by saying it will implement driver background checks throughout India.

“Our deepest sympathies remain with the victim of this horrific crime,” according to an Uber spokesperson. “We are cooperating fully with the authorities to ensure the perpetrator is brought to justice.”

The lawsuit comes as Uber faces withering criticism on a number of fronts including its entry into some cities without government approval. It also come under heat for threats against journalists and its policy of surge pricing, in which the cost of rides can fluctuate widely based on demand.

In the lawsuit, the plaintiff accused Uber of being “focused more on its bottom-line profit than practical and effective safety measures that could save lives.” It added that the company’s statements about safety being a top priority are “false and hollow.”

After the news of the rape came to light, Uber released a statement saying it “must do better” and that it “had more work to do” for customer safety. CEO Travis Kalanick has said that his company “will do everything, I repeat everything to help bring this perpetrator [of rape] to justice and to support the victim and her family in her recovery.”

The court document, however, alleges that “Uber has shunned and avoided all contact” with the plaintiff.

Watch more of the latest coverage about Uber from Fortune’s video team:

Two ex-WWE wrestlers file lawsuit over concussions

(REUTERS) – Two former WWE professional wrestlers say they have serious brain injuries after suffering repeated concussions in the ring and have filed a potential class-action lawsuit against the Connecticut-based company in federal court in Philadelphia.

“Under the guise of providing ‘entertainment,’ WWE has, for decades, subjected its wrestlers to extreme physical brutality that it knew, or should have known” causes a variety of medical problems, including brain damage, the lawsuit said.

LoGrasso, whose ring names included Big Vito and Skull Von Krush, wrestled in the WWE from 1991 to 1998 and from 2005 to 2007, was “seriously and obviously injured countless times,” according to the lawsuit. It said he was “forced to wrestle though he was losing consciousness before and during matches.”

LoGrasso now suffers from “serious neurological damage” and has memory loss, depression and anxiety, the lawsuit said.

Singleton wrestled for WWE under the name of Adam Mercer from 2012 to 2013 and at the age of 19 was among the youngest wrestlers in WWE history. He now has “an array of serious symptoms,” including tremors, convulsions, memory loss and “impaired ability to reason,” the lawsuit said.

The lawsuit is similar to those filed in several other U.S. sports, including the National Football League, whose settlement with former players over concussions could reach as high as $1 billion.

Attorney Jerry McDevitt, representing the WWE WWE, said the suit was similar to one filed in Oregon and that WWE had never concealed medical information from its wrestlers.

“WWE was well ahead of sports organizations in implementing concussion management procedures and policies as a precautionary measure as the science and research on this issue emerged,” he said.

S&P may pay $1.5 billion to settle mortgage rating lawsuit

(REUTERS) – Standard and Poor’s is in talks to pay as much as $1.5 billion to settle U.S. government lawsuits over mortgage ratings issued in the run-up to the 2008 financial crisis, a person familiar with the matter said on Tuesday.

The settlement of civil fraud litigation may be reached as soon as this month, two people familiar with the matter said.

S&P, a unit of McGraw Hill Financial MHFI, is trying to resolve lawsuits filed by the U.S. Department of Justice and more than a dozen states that accused it of inflating credit ratings to win more business from issuers.

It had previously been expected to pay slightly more than $1 billion to settle, another person familiar with the matter told Reuters last week. The final amount could fluctuate as more states sign on, that person said.

In a civil fraud lawsuit filed in February 2013, the Justice Department claimed that investors lost billions of dollars after buying mortgage-backed debt whose risks had been misrepresented by S&P.

The government said insured institutions had suffered more than $5 billion in losses, and sought to recoup that amount from S&P.

Fox could be the latest to settle an ad-skipping lawsuit with Dish Network

A two-year old Fox Broadcasting lawsuit over a Dish Network DVR service that lets its customers skip commercials when streaming recorded television shows may not make it to trial.

The two companies told a federal judge in Los Angeles Thursday that they wanted to pause the litigation about a month before the trial was set to begin. In a court filing, Fox and Dish called a resolution of the lawsuit “highly likely” after their resolution Thursday of a fee dispute that had blocked the Fox News and Fox Business channels on the Dish DISH service for more than three weeks.

The lawsuit dates back to 2012, when Fox FOX accused Dish of copyright infringement and breach of contract over the DVR service AutoHop — also known as the Hopper — which lets Dish customers skip commercials when watching recorded programming. The suit later added Dish’s Sling service, which lets customers stream programming on a computer or mobile device — and, which will soon offer a handful of cable channels for $20 per month.

After the U.S. Supreme Court’s June decision declaring Aereo — a service that let users stream broadcast television shows on a computer for a monthly subscription — illegal, Fox argued that Dish’s streaming DVR service should also be found to violate content providers’ copyrights. However, Dish countered that its service is different from what Aereo offered. “Sling sends content that is already paid for and lawfully possessed by the viewer; Aereo did not,” Dish said in a court filing last fall.

Fox is not the only broadcaster to take issue with Dish’s DVR service, as the satellite company has also faced similar litigation involving CBS CBS, NBC and the Walt Disney Company DIS. Last year, Disney and CBS both settled their lawsuits with Dish after each content provider also renegotiated their own network carriage agreements. NBC’s lawsuit is ongoing.

Apple, Google reach new deal to end lawsuit over employee poaching

Reuters) – Four Silicon Valley companies including Apple Inc and Google Inc have agreed to a new settlement that would resolve an antitrust class action lawsuit by tech workers, who accused the firms of conspiring to avoid poaching each other’s employees.

Plaintiffs accused Apple, Google, Intel Corp and Adobe Systems Inc in their 2011 lawsuit of limiting job mobility and, as a result, keeping a lid on salaries. The case has been closely watched because of the possibility of big damages being awarded and for the opportunity to peek into the world of some of America’s elite tech firms.

U.S. District Judge Lucy Koh in San Jose, California, last year rejected a $324.5 million settlement of the lawsuit as too low after one of the named plaintiffs objected.

That worker will support the new agreement, his attorney Daniel Girard said. However, Girard declined to disclose the amount, and it was not included in the court filing.

Representatives for Apple AAPL, Intel INTC and Adobe ADBE declined to comment. A Google GOOG spokesman could not be reached, nor could an attorney for the plaintiffs.

The case was based largely on emails in which Apple co-founder Steve Jobs, former Google Chief Executive Officer Eric Schmidt and some of their rivals detailed plans to avoid poaching each other’s prized engineers.

In rejecting the $324.5 million deal, Koh repeatedly referred to a related 2013 settlement involving Disney and Intuit. Apple and Google workers got proportionally less than Disney workers, Koh wrote, even though plaintiff lawyers had “much more leverage” against Apple and Google.

To match the earlier settlement, the deal with Apple, Google, Intel and Adobe “would need to total at least $380 million,” Koh wrote.

In the short court filing on Tuesday, the companies said plaintiffs will file a detailed explanation of the new deal “imminently.” Koh will then likely decide whether to accept or reject it.

Audio equipment maker Monster sues Apple’s Beats over alleged fraud

(REUTERS) – Audio equipment maker Monster has sued Beats Electronics, owned by Apple, over alleged “fraud and deceit” in the way that Beats acquired control of the rights to the popular “Beats by Dr. Dre” headphones.

Under a partnership formed in 2008, Monster and Beats developed “Beats by Dr. Dre,” a line of colorful, high-end headphones that vie with the likes of Skullcandy and Bose.

According to the suit filed in San Mateo County Superior Court in California on Tuesday, Monster engineered the success of the headphones and was unfairly cut out before Beats was sold to Apple last year.

The complaint names Beats co-founders Jimmy Iovine and Dr. Dre as well as HTC America Holdings Inc, a unit of Taiwanese smartphone maker HTC Corp among others, as defendants.

Iovine is the co-founder of Interscope Records, a rap music pioneer that branched out to include acts like Lady Gaga and U2. Dr. Dre is a U.S. rapper and music producer.

The defendants fraudulently acquired Monster’s “Beats By Dr. Dre” product line including all development, engineering, manufacturing, marketing, distributing and retail rights, via a “sham” transaction with HTC, according to the complaint.

In 2011, HTC said it would buy a 51% stake in Beats for $309 million. Beats bought back half of HTC’s interest in the company soon after the transaction, the complaint said.

The complaint alleges the defendants used the change of control as an excuse to end its relationship with Monster in 2012, and that they had made millions off the work of Lee and Monster.